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Larry Summers as hero: Que Helicopter Money?

by ARGeezer Tue Jul 12th, 2016 at 10:07:28 PM EST

Is "Helicopter Money" About to Rain Upon the World? Guest Post by David Llewellyn-Smith in Naked Capitalism

Ever since the BOJ announced a new negative interest rate policy earlier this year (NIRP) the yen has stopped falling and reversed upwards. That is, despite weak Japanese growth, despite an inverted yield curve and deeply negative long bond, and despite still weak inflation, markets have bet on spectacularly easy monetary policy generating even more of all four.  This is what is know as "quantitative failure", the notion that negative interest rates will not expand the monetary base owing to such phenomenon as crushed bank margins and the hoarding of cash under mattresses, so the currency is therefore going to rise.
....
Meanwhile, in an effort to calm potential concerns about the integrity of the fiscal budget central bankers implementing such a future monetisation of infrastructure spending will doubtless be at pains to describe the process as a "one off" though, as the ever theoretical Bernanke stated in his blog: "To have its full effect, the increase in the money supply must be perceived as permanent by the public."

...a policy of "helicopter money" is only likely to work if it is done on an ongoing basis and in continuing and growing amounts. But at that point the risk of a policy mistake grows exponentially, in terms of a potentially destabilising pickup in inflation expectations and a related pickup in velocity.

Frontpaged - Frank Schnittger


There is some other movement around the place to support a renewed Japanese monetary experiment. Ben Bernanke will visit the BOJ and Prime Minster Shinzo Abe this week....As well, Larry Summers wrote late last week in the Washington Post:(behind a subscription wall)
I believe these developments all reflect a growing awareness of the importance of the secular stagnation risks I have highlighted over the last several years. There is a growing sense that the world is demand-short -- that the real interest rates necessary to equate investment and saving at full employment are very low and often may be unattainable given the bounds on nominal interest rate reductions. The result is very low long-term real rates, sluggish growth expectations, concerns about the ability even over the fairly long term to get inflation to average 2 percent, and a sense that the Fed and the world's major central banks will not be able to normalize financial conditions in the foreseeable future.

Having the right worldview is essential if there is to be a chance of making the right decisions. Here are the necessary adjustments:

First, with differences between countries, neutral real interest rates are likely close to zero going forward. Think about the U.S., where growth has been relatively robust by recent standards. Growth has averaged little more than potential for the last one, three or five years while the real Federal funds rate has been about -1 percent.  There is no good reason to think given sluggish investment expectations that the neutral rate will rise to be significantly positive in the foreseeable future. The situation is worse in other countries with more structural issues and slower labor-force growth. Substantial continued reductions in Fed estimates of the real neutral rate lie ahead.

So, 'traditional' QE won't work. What now?
Second, as counterintuitive as it is to central bankers who came of age when the inflation of the 1970s defined the central banking challenge, our problem today is insufficient inflation. In the U.S., Europe and Japan, markets are now expecting inflation that is below target even with full employment over the next 10 years. This is despite a 70 percent rise in the price of oil. Evidence from markets and some surveys suggests that inflation expectations are becoming unhinged to the downside. The policy challenge with respect to credibility is exactly the opposite of what it has been historically -- it is to convince people that prices will rise at target rates in the future.  This is likely to require some combination of very tight markets and mechanisms that give confidence that during the best times, inflation will be allowed to exceed target levels so that over the long term, they can average target levels.

The challenge "is to convince people that prices will rise at target rates in the future." This makes sense and will certainly be more fun than continuing to obsess about debt. It is good to see it in print from Larry. And all without having to invoke MMT. Maybe some will now consider these options.
Third, in a world where interest rates over horizons of more than a generation are far lower than even pessimistic projections of growth, traditional thinking about debt sustainability needs to be discarded.  In the U.S., the U.K., the Euro area and Japan, the real cost of even 30-year debt will be negative or negligible if inflation targets are achieved. Indeed, the conditions Brad DeLong and I set out in 2012 for expansionary fiscal policy to pay for itself are much more easily satisfied today than they were at that time.

Fourth, the traditional suite of structural policies to promote flexibility are not especially likely to be successful in the current environment, though some structural policy approaches such as removal of restrictions on investment are still desirable.  Indeed, in the presence of chronic excess supply, structural reform has the risk of spurring disinflation rather than contributing to a necessary increase in inflation.  There is, in fact, a case for strengthening entitlement benefits so as to promote current demand.


"Strengthening entitlement benefits!, expansionary fiscal policy! How many times have heterodox economists made those same arguments in the last six years? Was it, perhaps, their failure to use the magic words 'the cost of long term debt will be negative' that kept this message from getting through?

Back to David Llewellyn-Smith:

These are the monetary titans of our times  shifting radically towards various new forms of stimulus. Resistance to them is likely still to be strong on Western economic institutions but it is Japan that has led the world into the deflationary era and it is in Japan that the next phase of monetary innovation is likely to be pioneered.
This is hopeful in that Larry Summers is an adviser to Hillary Clinton and will likely be tapped for a major position, perhaps Secretary of Treasury. Try the measures first in Japan, then, as Larry said, in the EMU "if the Germans can get over themsleves." and then in the UK and US. With the largest economies all coordinating efforts the negatives would be reduced and smaller economies could join the process. Now that he is pointed in the right direction he could do some real good for the economy. Before it is too late.

Display:
There is, perhaps, one elephant in the room which Larry and all the orthodox bankers and economic commentators are ignoring.  It is called a wealth tax.   If you put (say) a 2% p.a. tax on all liquid wealth (cash or cash equivalent) you are effectively introducing a 2% inflation rate, because you will require 2% more cash next year to buy the same amount of stuff as it would cost you this year.  Then lots of people will start hoarding stuff instead of cash to escape the tax and the cost of stuff will rise by 2% to neutralize the tax.  Bingo! 2 % inflation by executive fiat.

Of course heaven forbid that VSP and representatives of the 1% should propose a wealth tax...

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Jul 13th, 2016 at 09:59:15 AM EST
I never imagined I would be saying good things about Larry, but what he is now arguing would be/(will be?)  seriously good for the economic prospects of the USA, but I think HIM proposing a wealth tax of 2% would be a bridge too far for him at present, would jeopardize his reputation and his mainstream cred and alienate too many billionaires. Driving a stake through the notion that 'there is no money' by pointing out that even using long term bonds to finance infrastructure and research will have a negative cost - i.e. will pay a dividend, is, by itself, a signal service.


"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jul 13th, 2016 at 01:36:42 PM EST
[ Parent ]
" It is called a wealth tax.   If you put (say) a 2% p.a. tax on all liquid wealth (cash or cash equivalent) you are effectively introducing a 2% inflation rate, because you will require 2% more cash next year to buy the same amount of stuff as it would cost you this year.  Then lots of people will start hoarding stuff instead of cash to escape the tax and the cost of stuff will rise by 2% to neutralize the tax. "

Well, other than this being a liquid wealth tax as opposed to a wealth tax, you are more likely to get an asset price inflation, which is precisely not the one you are looking for. You could end up with a massive property bubble while consumer goods go nowhere, which would be terrible for employment and for the prospect of new households.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Wed Jul 13th, 2016 at 05:56:42 PM EST
[ Parent ]
If we want to attack wealth with a tax we should take a page from the Georgists and have a tax based on the assessed value of land at its best and highest use based on zoning and a tax on any other 'enclosure of the commons', especially intellectual property rights.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jul 13th, 2016 at 07:21:26 PM EST
[ Parent ]
I think that is a fair point.  I agree the wealth tax would have to apply to all wealth in order to generate the effective inflation everybody now seems to agree is needed - and at the same time start to address the generic problem of growing inequalities in our societies.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Jul 14th, 2016 at 09:29:28 AM EST
[ Parent ]
I don't think a tax has to apply to all equally - if we consider 'all' to include billionaires and the dispossessed. Having it apply only to monopolies - legal enclosures of the commons, either physical or intellectual, makes sense to me. And having regulations that only apply to such monopolies also makes sense. With privilege comes responsibility, so let that responsibility be economic. For instance, with copyrights, have a low tax on revenues up to the amount equal to twice the median income, increasing from there, and increasing for every decade after the author's death, ending when the copyright is returned to the public domain, tighten up the extensions on patents and have consideration included for publicly financed research that contributed to the patent.

Then set a tax on corporate licenses that approximates the value conferred by corporate status. Make it such that it will be a real decision as to whether to do business as a person or persons, with insurance, or to pay the corporate tax. The revenue thus made available would defray the cost of 'externalities' of corporate operation and then some.  

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Jul 14th, 2016 at 03:00:02 PM EST
[ Parent ]
I think the simpler the better, and the more global the better - because otherwise otherwise all sorts of incentives apply to move IP and other wealth around.  Why not charge 2% on all private and corporate wealth (plus depreciation) above $1 Million.  That helps small and start-up businesses and ensures most people don't have to pay double for their home etc., and there isn't an incentive to apply unrealistic depreciation rates.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Jul 14th, 2016 at 03:56:29 PM EST
[ Parent ]
That would probably have the effect of motivating most corporations and most individuals with wealth over $10 Million to establish a foreign residency and, possibly, another citizenship. 2% of $10 million/year would well exceed any state pension and health care benefit.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Jul 15th, 2016 at 01:57:35 AM EST
[ Parent ]
Negative bond yields
Germany's 10-year government bond yield turned negative for the first time at an auction on Wednesday, fetching the lowest average real yield at auction on record for such paper at -0.05 per cent, the debt office said.

Irish Government bonds benefitted from the positive mood with 10-year yields falling to 0.416 per cent, hovering near record lows.



Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Jul 13th, 2016 at 02:38:15 PM EST
At these rates, private investors are virtually begging states to take their money off their hands and do something useful with it, like increasing demand or developing capacity through infrastructural development.  The problem is that this is totally at odds with the neo-liberal philosophy they espouse - reforming states by slashing entitlements and state investment.  In many ways they are the victims of their own success in ideologically capturing state elites. They should have been clearer that their ideology was intended for the rubes and that state actors should have ignored them.  The problem here is that the rubes have been passing on that message to state elites and threatening any government that proposes Keynesian remedies.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Jul 13th, 2016 at 02:44:59 PM EST
[ Parent ]
Helicopter money 'the next step' in monetary policy says Fed official Loretta Mester Australian Broadcasting Company  (H/T Zero Hedge for the link)
A top official from the US Federal Reserve has said "helicopter money" could be considered to stimulate America's economy if conventional monetary policy fails. Dr Loretta Mester, president of the Federal Reserve Bank of Cleveland and a member of the rate-setting Federal Open Market Committee (FOMC), signalled direct payments to households and businesses to stoke spending was an option if interest rate cuts and quantitative easing fail.
....
Dr Mester's qualified support for the use of "helicopter money" - when stimulus is directly pumped into the real economy, not through the banking system - comes amid expectations that the Bank of Japan is poised to unleash a major fiscal stimulus package of at least 10 trillion yen ($130 billion) to kickstart its flat-lining economy....The comments come as major central banks - including the US Federal Reserve, the European Central Bank and the Bank of Japan - consider unconventional policy tools in a world of slowing growth, low inflation and record low interest rates.
....
While Britain's shock decision to leave the European Union contributed to the Fed's decision to leave interest rates on hold last month, Dr Mester believes there are risks in keeping US interest rates too low for too long. "For the US, if we overstay our welcome at zero then of course there would be financial stability risks," Dr Mester acknowledged.

AFAIK, under current US law, the Fed could support Overt Monetary Finance of US Government spending but could not do so on its own. Mester was talking about 'the medium term' which I take to mean 'not before late January, 2017, and only if Democrats hold the House, Senate and Presidency'.


"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jul 13th, 2016 at 03:40:38 PM EST
Don't believe it, ARG!  I believed Larry had finally changed eight years ago, and then he fucked all of us on the stimulus.  He's doing his once-every-eight-years rehab schtick.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Thu Jul 14th, 2016 at 10:58:31 PM EST
My dark fear is that this is just a campaign ploy. But anything that discredits "There Is No Money" bullshit is a plus in my books. Especially when it comes from Mr. Mainstream himself.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Jul 15th, 2016 at 01:45:48 AM EST
[ Parent ]
I think "Helicopter money" as a term reads as a non-serious comedy routine from the billionaires all the way down to the poor. If he were saying "Guaranteed Minimum Income" that would be an ideological nuclear bomb to take notice of.

you are the media you consume.

by MillMan (millguy at gmail) on Sat Jul 16th, 2016 at 06:27:00 PM EST
[ Parent ]
It was originally Bernanke's term. What he was describing was a way to stimulate the economy by distributing money about the country widely, as dropping money from helicopters would do. It was a rhetorical device and I suspect that he chose it for effect. He was certainly well aware that the billionaire class, including those who donate to universities and think tanks, would abhor a suggestion of just having the Fed credit the money to taxpayers' bank accounts, but thought that 'helicopter money' would be more acceptable as it was so comically bizarre.

Now Summers comes along and suggests just having the government fund needed infrastructure and other expenses by borrowing at current low rates - deficit finance. I presume he intends that this would still involve a public bid/offer process to 'sanitize' the appearances, but, even then, he points out, it would have a negative cost as the economic activity it would stimulate would more than cover the cost of the bond. Or, as he more opaquely put it, it has negative cost.

I find this extraodinary, as Summers has just blown a hole in the arguments of deficit hawks. If the country profits from deficit financing of needed infrastructure and the economy is stagnating, what possible excuse is there not to do this? If $ Trillions created by the Fed to buy up bonds held by private institutions and just hold them to maturity on the Fed's balance sheet hasn't caused inflation - and it hasn't, why should a fraction of that amount issued for needed public infrastructure projects and to provide needed economic activity to boost demand for goods and services be a problem? And the very wealthy themselves will likely be divided on this issue.

I think Summers is betting it will be better for his legacy to have made this sensible and workable suggestion, whether or not it is implemented, than to just stand and watch the world slide into deflation. That fear is why I so regularly recommend people read Irving Fisher's Debt Deflation Theory of Great Depressions. Such processes are hugely damaging to societies. As one with the reputation of being the smartest guy in the room, Summers wants to be on record as having recommended something that would work to prevent this dire outcome. And even if he backpedals, he can't 'un-say' it.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sun Jul 17th, 2016 at 02:10:41 AM EST
[ Parent ]
There are similar noises being made in the UK. It's not obvious yet if our new chancellor is going to take any notice, but the argument is on the table.

What was the point of austerity? Economically, it was a disaster.

But politically it cowed the working class, which was probably the plan.

Now there seems to be the beginnings of an understanding that if austerity continues there will be rioting and instability, and so perhaps the purse strings will be loosened a little.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun Jul 17th, 2016 at 11:36:04 AM EST
[ Parent ]
Austerity's always an easy sell, because people naturally think of governments like households and businesses with given incomes that need to be adhered to.  So trying to explain why deficits are nothing to be frightened of is an almost impossible battle.

And politicians -- who are mostly lawyers and MBAs -- generally don't get the distinction either.  At best you have guys like Obama and Brown who get the gist of it -- those two got it better than most (Brown once the crisis hit, not so much before), really -- but are also imprisoned to a large degree by our discourse (where the press and public largely don't get it).  It doesn't help that you have guys like Summers who like to be seen as SeriousTM, despite being well-equipped to know better.  (This is part of the problem with Larry.  He fancies himself a political operative on top of being an economist.)

I do think the discourse is getting better.  As you said, it's plainly obvious that austerity is nuts.  The issue is how to convey the inherently counterintuitive nature -- Relative to the conventional wisdom of the bulk of voters and opinion-makers go -- of Keynesianism in a simple, understandable way to masses of people.  Doing so with an individual is easy, in my experience.  But masses are prone to sound bites.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sun Jul 17th, 2016 at 03:23:16 PM EST
[ Parent ]
Well - thinking again, obviously austerity wasn't a disaster for a core of Tory voters.

We've had a property and equity bubble funded by QE, and tax cuts, and huge increases in profitability in many companies, as workers have been forced to accept lower pay and much less secure working conditions.

There have been some token tax rises on property speculation, but they're tiny compared to the bubble-icious income generated by the speculation itself.

So generally austerity has been a big win for the 1% - which was reason enough to do it, if you're in the 1%.

And it hasn't needed to be communicated to the masses. The Tories won the last election largely on the promise of the referendum, not because of their stellar economic record. I have no idea where we'll be in 2020, but you can always trust the Tories to twist the truth into a single dishonest hot-button message.

Democratically, the political problem has always been how to persuade people to vote in their own interests, instead of against them. And that's very hard and when the press and media are wholly-owned propaganda outlets.

I don't have a solution that doesn't start with creating low-polspeak high-engagement constituency outreach groups and holding public meetings and going door to door now, well before the next election.

I think Corbyn sort of gets some of that, if maybe not enough.

The PLP certainly don't want it at all.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sun Jul 17th, 2016 at 08:54:08 PM EST
[ Parent ]
ThatBritGuy:
Well - thinking again, obviously austerity wasn't a disaster for a core of Tory voters.
So generally austerity has been a big win for the 1% - which was reason enough to do it, if you're in the 1%.

The 1% are, by definition, a very small core of Tory voters. This would imply that a large portion of Tory voters, who are subjected to " lower pay and much less secure working conditions" have been mostly voting against their own interest.

ThatBritGuy:

I don't have a solution that doesn't start with creating low-polspeak high-engagement constituency outreach groups and holding public meetings and going door to door now, well before the next election.

Looks like the only alternative...

by Bernard on Tue Jul 19th, 2016 at 06:53:52 PM EST
[ Parent ]
I think we are missing the beneficiaries of the housing bubble here. Definitely not all in the 1%. Enough to form the base for a viable party?
by generic on Wed Jul 20th, 2016 at 08:09:51 AM EST
[ Parent ]
True enough: home ownership rate in the UK is about 65%. Even if not every home owner has sold her house with a significant profit, rising home prices still gives them a feeling of being wealthier than they really are - the so-called "wealth effect". Of course, those selling their homes at an inflated price mostly buy another one - at yet another inflated price, so the real "profits" are dubious.
by Bernard on Wed Jul 20th, 2016 at 09:46:23 AM EST
[ Parent ]
That's why they retire to Spain.. But that implies Brexit blew up the retirement plan of almost all of the Tory party. Ehh.. Whut?
by Thomas on Wed Jul 20th, 2016 at 10:06:48 AM EST
[ Parent ]
Are there any affordable retirement destinations in the UK?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jul 20th, 2016 at 05:39:08 PM EST
[ Parent ]
Not that can absorb retirees by the millions like Spain. If the UK government permitted and enabled that kind of construction spree, the housing bubble wouldn't exist in the first place.
Hence: Wut?
by Thomas on Wed Jul 20th, 2016 at 07:45:52 PM EST
[ Parent ]
Plenty of once flourishing holiday resorts, like Blackpool, that are now deserted in favor of southern Europe, thanks to low-cost flights.

Blackpool - Wikipedia, the free encyclopedia

Shifts in tastes, combined with opportunities for Britons to travel overseas, affected Blackpool's status as a leading resort in the late 20th century.
by Bernard on Thu Jul 21st, 2016 at 09:42:27 AM EST
[ Parent ]
1-bed flat for 40,000.
by gk (gk (gk quattro due due sette @gmail.com)) on Thu Jul 21st, 2016 at 09:46:45 AM EST
[ Parent ]
Suddenly the heading of this sub thread seems to apply to post-Brexit UK.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Jul 21st, 2016 at 01:11:45 PM EST
[ Parent ]
Well, maybe we need a new Brexit thread...
by Bernard on Thu Jul 21st, 2016 at 03:06:37 PM EST
[ Parent ]
What is the income distribution of home owners in the UK?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jul 20th, 2016 at 05:36:55 PM EST
[ Parent ]
European Tribune - Comments - Larry Summers as hero: Que Helicopter Money?
Austerity's always an easy sell, because people naturally think of governments like households and businesses with given incomes that need to be adhered to.  So trying to explain why deficits are nothing to be frightened of is an almost impossible battle.

If you start in another end, and argue that it is nuts to pay people to do nothing when you could pay them to do stuff instead, you have a compelling story and one that is upwards and onwards instead of hair shirts. The problem is not that austerity is an easy sell, but that its sellers has a grip on the propaganda aparatus.

Remember before the financial crash, when it was widely argued on this very site that the green movement could never win victories as long as it insisted on stories of hair shirts instead of stories of a better future?

by fjallstrom on Sun Jul 17th, 2016 at 09:50:23 PM EST
[ Parent ]
Larry's story is optimistic. It just needs to be translated into everyday language and to be widely disseminated via media. Translation is easy and social media is already happening to some extent. MSM - difficult to even get mentioned.  

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jul 18th, 2016 at 01:40:25 AM EST
[ Parent ]
The articles I've seen which mention the subject have all been pretty positive. But they are all economics-wonk style, not mainstream.
Have there been any notable articles from "authoritative" sources opposing the idea?

If not, then I suppose we are still at the "First they ignore you" stage...

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Mon Jul 18th, 2016 at 06:13:14 AM EST
Larry is never going to convince the broad public. That is not his intended audience. But, with Stiglitz, Krugman, Bernanke, Solow and others all rowing in the same direction it should be relatively easy to get this through a Democratic house and Senate and have it signed by a Democratic President. Then, by 2020 such a policy could start to show what it can do and what it won't do, and by 2024 it could be well on its way to being established as the new wisdom. If inflation ever does start to get out of control, well, one thing the Fed really can do well is strangle the economy.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Jul 18th, 2016 at 12:18:40 PM EST
[ Parent ]
Voters deserve responsible nationalism not reflex globalism - Lawrence Summers
The mainstream approach starts with a combination of rational argument and inflated rhetoric about the economic consequences of international integration. ...

The second plank of the mainstream approach is to push for stronger policies to resist inequality, cushion disruptions and support the poor and middle class, and then argue that if domestic policies are right, the pressure to resist globalisation will reduce. ... It is not that strong domestic policies are unnecessary to undergird global integration. It is that they are insufficient.

A new approach has to start from the idea that the basic responsibility of government is to maximise the welfare of citizens, not to pursue some abstract concept of the global good. ...

If Italy's banking system is badly undercapitalised and the country's democratically elected government wants to use taxpayer money to recapitalise it, why should some international agreement prevent it from doing so? ... Why should the international community seek to prevent countries that wish to limit capital inflows from doing so?



Schengen is toast!
by epochepoque on Wed Jul 20th, 2016 at 11:33:20 PM EST
Well, the old approach was not pursuing 'some abstract good.' More profits for the financial sector was a very concrete good to the executive suites of the banks. And, why should governments 'wish to limit capital inflows'? Obviously, to prevent disastrous rapid capital outflows. But at least he is rowing in the right direction.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Jul 21st, 2016 at 01:21:01 PM EST
[ Parent ]


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